This film is set in a Victorian era that might have been, influenced by the visions of writers such as Jules Verne. As Pazu, the apprentice of the engineer who maintains a mine's elevator machinery, carries his boss's dinner back to the mine, an unconscious pigtailed girl floats down from the sky into his arms. This girl, Sheeta, and her magical levitation-stone pendant hold the key to a mysterious, mythical sky-castle known as Laputa. Sheeta and Pazu must flee from both air-pirates, who seek the sky kingdom for its legendary treasure, and the army, led by a government agent with his own mysterious agenda for Laputa.

The name "Laputa" was taken from the flying city in Jonathan Swift's "Gulliver's Travels." It also means "the whore" in Spanish, hence the name change to simply "Castle in the Sky" for the Disney release.

Pazu:
A girl just fell from the sky, boss!

Continuity: When Dola announces that Goliath is off of the port bow, she looks in horror towards the Tiger Moth's stern, the opposite direction from that which she announces.